As the countdown to Brexit resumes, it won’t be long before our TVs, emails, phones and day to day lives are flooded with Brexit speculation (we’ve had enough flooding this year without the help of Boris and Brexit).
However, as the 31st of October fast approaches, we know the attention will inevitably be turned to Brexit.
Whether you’re an enthusiastic Brexiteer or a devoted remainer, there’s no denying that our impending exit from the EU is causing property market jitters. We firmly believe now is not the time to get spooked and we’ve created a guide to share with you our expert perspective on Brexit.
As experts in our industry, we’d love to tell you we have the answers to what will happen with the property market post Brexit. Unfortunately, we don’t have a crystal ball that we can consult with to give you accurate post-Brexit predictions.
However, we can use our knowledge and experience to give you likely outcomes. There really isn’t anyone better qualified to do so than our director, Colin Mellor. So without further a due, we’ll let Colin share a few golden nuggets of information with you to help paint a clearer picture of what a post-Brexit future will look like.
“Over the 40 years I have been selling houses, I am regularly being asked to forecast the future of the housing market and to advise vendors on which way the market is going to go.
After experiencing the highs and lows (2007) of the property market, I’d say I have enough experience behind me to suggest some accurate outcomes for 2019. There are 3 possible outcomes that cover the next 6 months, here’s a quick overview of each one.”
“Believe it or not, the current market is in a very calm place. I know that sounds so out of sync with all of the turmoil you’re reading about in the papers. However, there’s a reason for this fairly flat environment within the housing market – we’ll get onto that shortly.
Firstly, supply and demand are about level. Yes, there aren’t a lot of new properties coming to the market but the market isn’t flooded with buyers either. This represents the calm before the storm.
Why is the market so flat? Brexit strikes again. Prospective buyers and sellers are playing the waiting game to see how Brexit pans out before they make a move. Essentially, all this waiting and watching has put a lot of people in property market limbo.
Although the property market might seem a little empty, it’s created a golden opportunity for home movers. This lack of energy in the market has formed a really stable ground for buyers and sellers who are active now.
There’s less competition for properties, mortgage rates are still cheap and houses are still selling for great prices – and some home movers are taking advantage of this whilst they can.
It’s like the smart shoppers who take advantage of the Trafford centre on a weekday over the Christmas period. Calm is good.”
“Worst case scenario? Brexit doesn’t go as planned and we leave the EU without a deal. I’ve heard a lot of talk about massive house price falls if this were to happen. Honestly, I believe this won’t happen.
What I do believe is that it could have a negative impact on house prices and we see a small fall. We’re not going to have another repeat of 2009 where house prices fell 17%.
The fall in property prices wasn’t due to a lack of demand, the house buying sentiment remained the same throughout this period. People still wanted to buy houses but couldn’t. Why? Well, first of all, no one was lending money.
The credit market froze as institutions such as banks and building societies refused to lend any money. Mortgage funds just weren’t available to prospective buyers, which is why house prices began to fall.
Essentially, the great recession of the late 2000s was the worst financial crash the world has ever seen.
My point is, that despite this recession house prices only dropped by 17%. In the grand scheme of things, 17% isn’t that staggering and our circumstances aren’t half as bad as they were a decade ago.
Our current economic situation is very different from what it was ten years ago. Yes, there will be a lot of uncertainty until we understand the true implications of a no-deal Brexit. However, it’s only likely to have a negative impact on house prices in the short term.”
“If a deal is done before the end of October, we’ll see the arrival of the Brexit wave. Never heard the term? Let me explain.
Over the last few years, we have seen fewer sellers coming to the market. According to residential analyst Neal Hudson, transaction levels were down by 20% in 2018. This lull in the market means there is a lot of pent up demand, which is where the wave comes in.
Think of it in terms of Black Friday. You decide you want a new TV but it’s the beginning of November, so you decide to wait. When Black Friday finally comes around you then spend the whole day chasing deals that keep being replaced with OUT OF STOCK messages.
Naturally, you’re probably feeling pretty frustrated after the whole ordeal. You’ve missed out on enjoying a new TV for the last month and you end up buying one two weeks later for a similar price you could have bought it for at the beginning of November. That situation sounds like a total pain in the butt, doesn’t it?
Now, let’s multiply that experience by 10. You put your house on the market, it sells quickly for a fantastic price (when you use Edward Mellor, obviously) and then you start trying to find your next property.
This is when the whole house hunting process starts to resemble that Black Friday nightmare we talked about earlier. You find your dream home and put in an offer, which keeps getting beaten by other prospective buyers.
Offer after offer, you keep getting beaten, so you need to keep offering more. Eventually, you get the house you want, but there’s incredible pressure to get to the finish line.”
“Buying and selling ANYTHING operates at its best in a stable market. Panic selling does create opportunities, but generally, these are for people that operate on the edges of the market, not for the general public.
Why is this not a great opportunity for the general market? Because time is against you! Whenever a market is moving quickly and the normal house seller has to arrange mortgages, solicitors, and still has to do all the normal task of daily life – it’s not possible to stop the effects of an unstable market impacting on the transaction.
Therefore, the best time to buy or sell anything is when everything is nice and stable. You’re not under pressure from competing buyers pushing up prices on the property you want. You’re not worried about losing your buyer because the market has turned downwards and they want to offer less. Instead, you’re in a calm environment that will allow you to make important decisions in your own time.
The reality is, if you own a house, you’ll likely own it for well over 40 years. No matter what happens over time, when you look at the 40 years as a whole there’s only one winner – the present!
Don’t sabotage your future by putting off your move over what may or may not happen. Worry about what you can do to benefit yourself today. Make sure you fix your mortgage for a period of time you’re comfortable with and keep your life moving forward with positive thoughts and outcomes that never gets truly appreciated until the transaction is done.”
Putting your life on hold because of Brexit isn’t the answer. Making great things happen for yourself by taking action today is the best way forward.
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